Here are each of the expanded points from the top 10 errors investors make:

Category: Investing

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

5 Responses to “Overview: Top 10 Investor Errors”

  1. farmera1 says:

    For item 1 on the list: Excess Fees

    Here is a little video to help illustrate the impact of 401k fees. The concept is the same for excess fees in other areas such as mutual funds, adviser fees or other fees both hidden (as in most 401ks), annuities or buying bonds and such and visible.

    http://www.reuters.com/video/2012/07/31/reuters-tv-fees-can-kneecap-your-retirement-fund-in?videoId=236759486&videoChannel=118058

    I like the title:

    Fees can kneecap your retirement fund – Investing 201

  2. lburgler says:

    I would add one, or maybe combine “excess fees” with “getting what you paid for” and add one:

    Confusing reality with perception.

    This is different from Cognitive Deficits, in that cognitive deficits as stated clearly favor empirical reality and disparage human distortions of that reality.

    While it is philosophically true that reality is GIVEN to perception, and hence comes first, it is perception that makes MEANING of reality, and so practically speaking, reality is nothing without which that that came afterwords. Counter-intuitive *par excellence*

    The point is that reality in terms of value is all about what people want and believe, and not about what the case may be. And I think it is miguided to believe that beliefs approach empirical reality on a longer timeline.

    How to quantify and act upon what people believe is a huge problem for data analysts and data analysis software the world over.

    Where the industry is going, I believe, is in learning to quatify sentiment, by classifying noise into categories of meaning. Nothing short of AI.

  3. lburgler says:

    12

  4. lburgler says:

    I would add one, or maybe combine #1 with #10, and add one:

    Confusing perception with reality.

    This is different from Cognitive Deficits #8 in that, #8 as stated clearly favors empirical reality over human perceptions of it.

    While it is clear that reality is GIVEN to perception, and hence comes before it authoritatively, perception makes MEANING of the given. Practically speaking, reality is nothing without perception, which comes after it. I call this asymmetric codependence, and it is counterintuitve, par excellence.

    The point is that markets are about what people want and believe, and so the reality of markets is not about empirical reality. I think it’s a great error to assume that prices approach empirical reality over a longer horizon, as the facts come into focus.

    Whosoever discovers a way to quatify the noise, and classify categories of meaning of sentiment, shall own this industry.

    Luckily quantifying meaning is a huge and interesting problem for data analysts and analysis software the world over. Nothing short of AI.

  5. faulkner says:

    Your list reveals some ‘Meta-Errors’ across them:

    A) Depending on the investment industry to educate you in your own best interests.
    B) Thinking your mastery of an area of your life can necessarily inform your investing.
    C) Applying ‘rules’ of everyday life to investing. For example, “You get what you pay for.”
    D) Believing you have an inborn talent for investing.
    E) Believing these lists do not apply to you.